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 Members of the U.S. House Ways and Means Committee
sent a letter to Gov. J.B. Pritzker Oct. 5 urging Illinois to repay $1.3 billion
in federal unemployment insurance debt before Nov. 10. Otherwise, the state’s
businesses will face another automatic tax hike.
The letter signed by U.S. House Ways and Means Committee member U.S. Rep. Darin
LaHood, R-Peoria, and the committee’s Republican leader, U.S. Rep. Kevin Brady,
R-Texas, warns taxes on employers will increase from $42 to $63 per worker in
2023 unless the federal unemployment insurance loans are repaid.
“We urge you and the state’s legislature to prioritize repayment of this
outstanding federal loan to prevent any additional economic burden on employers
and workers in Illinois,” the letter stated.
The congressmen pointed out the federal unemployment tax act already increased
businesses’ unemployment payments in September 2021 and will continue to do so
each November as long as the $1.3 billion debt remains.
The letter warned continued delinquency on these federal loans could force
business owners to pay as much as $420 per employee each year until the debt is
settled. The committee suggested Pritzker use part of the $8.1 billion Illinois
received in state pandemic recovery funds to pay down the balance.
“Without repayment, Main Street businesses are at risk of facing higher taxes
that will undercut job creation and drive prices higher just as families and
small businesses are struggling with record-high inflation and a looming
recession,” they wrote.
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“This self-imposed pain is preventable,” the letter stated. “As Members of the
House Ways and Means Committee that oversees unemployment benefits, we urge you
to address this delinquency promptly and responsibly by tapping your significant
budget surplus or applying federal coronavirus aid to ensure Illinois employers
and workers across the state do not bear the burden of the state’s inaction.”
Twenty-two states took federal loans during the pandemic. Most used COVID-19
relief funds to pay back those loans to avoid raising taxes on business owners.
Illinois is one of only four states that have yet to eliminate their federal
unemployment insurance debt. Colorado lawmakers pushed to repay their debt to
beat the Nov. 10 employer tax deadline.
Avoiding an automatic tax hike on businesses statewide is a top priority as
Illinois faces the possibility of a recession. Job creators are already
projected to pay $1.8 billion in higher commercial property taxes during the
next four years, but a proposal at the top of the Nov. 8 ballot threatens to
greatly boost the potential for a faster, higher rise.
Amendment 1 would enshrine permanent power for government unions in the Illinois
Constitution and restrict lawmakers from diminishing those powers. It vastly
expands negotiations past compensation and into vague areas such as “economic
welfare” and “safety at work” that promise more conflict in negotiations, more
strikes and more costs.
Illinois knows the cost of failing to repay its federal unemployment debt. It’s
anyone’s guess what Amendment 1 could cost.
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